ULIP- Unit Linked Insurance Plan

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ULIPs, or Unit Linked Insurance Plans, are financial products that offer a combination of investment and insurance benefits. ULIP Plans can be a good option for people who are looking for a life insurance product that also offers the potential for investment growth.

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    Zero LTCG Tax^

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Sameep Singh
Written By: Sameep Singh
Sameep Singh
Sameep Singh Business Unit Head - Domestic Savings
Mr. Sameep Singh is a Business Unit Head for the domestic Investment Business at policybazaar.com, holding a master's from Symbiosis School of Banking & Finance. He has played a pivotal role in crafting investment and term business strategies during his tenure at Policybazaar. His exceptional leadership has been instrumental in driving both product and business growth throughout his impressive career.
Vivek Jain
Reviewed By: Vivek Jain
Vivek Jain
Vivek Jain Head of Savings business
Mr. Vivek Jain is the Business Unit Head for Investment Business at Policybazaar.com. A graduate of the prestigious IIM Calcutta he brings over a decade of invaluable experience to his current role. In his capacity as Business Unit Head, he has been a driving force behind the success of Policybazaar's Investment business. Mr. Jain is recognized for his instrumental role in product innovation within the Savings/Investment domain. His leadership and expertise have been pivotal in scaling up the Investment business, underscoring his significant contributions to Policybazaar.com's growth and success.

What is ULIP (Unit-Linked Insurance Plan)?

ULIPs are investment products that combine the benefits of insurance and investment. A portion of premiums provides life coverage, while the rest is invested in various funds. They offer flexibility, tax benefits^, and a unique approach to achieving financial goals.

When you invest in a ULIP scheme, a part of your premium goes towards providing you with life insurance coverage, while the rest is invested in different large cap, mid cap, small cap and flexi cap funds of your choice. This makes the ULIP plan a unique investment option that can help you achieve your financial goals while also protecting your loved ones in case of an unforeseen event.

You hold the power to select from a diverse range of options – be it equity, debt, or a mix of both funds. 

ULIPs are a popular investment option because they offer flexibility to policyholders to choose and allocate funds according to their risk appetite and financial goals. Additionally, ULIP plans offer tax benefits^ under the Income Tax Act 1961^.

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ULIP - The Truth They Won’t Tell You | क्या आपको ULIP के बारे में ये पता है?

Best ULIP Plans in India 2024

Below are some of the best ULIP Plans in India:

Plan Names Entry Age Minimum Annual Investment ULIP Returns in 10-Years 
Bajaj Allianz Invest Protect Goal 18 years  ₹50,400 21.4%
TATA AIA Smart Sampoorna Raksha 18 years  ₹20,672 19.2%
HDFC Life Sampoorn Nivesh 18 years  ₹12,000 27.5%
HDFC Life Click2Invest 18 years  ₹12,500 27.5%
TATA AIA Fortune Pro  18 years  ₹12,000 21.2% 
Bajaj Allianz Goal Assure II 18 years ₹36,000 23.3%
Bajaj Allianz Smart Wealth Goal III 18 years ₹24,000 23.2%
Aditya Birla Wealth Aspire Plan 18 years  ₹40,000 19.3%
PNB Metlife Mera Wealth Plan 18 years  ₹12,000 18.3%
Bharti AXA Wealth Maximizer 18 years  ₹24,000 17.1%
Kotak Life E-Invest 18 years  ₹12,000 16%
Edelweiss Tokio Wealth Secure+ 0 years  ₹12,000 15%
Future Generali Big Dream  18 years  ₹18,000 14.3%
LIC SIIP Plan 18 years  ₹30,000 16.9% (RSI)
SBI Life eWealth Insurance  5 years ₹24,000 16.1% (RSI)
ICICI Pru LifeTime Classic  0 years ₹30,000 21.6%
Aviva i-Growth 18 years ₹48,000 13.8%
See More Plans

Disclaimer:
- Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.”
- The returns are the returns of the best-performing fund in the plan. * RSI: Returns Since Inception
- Data Source: Value Research

How Does the ULIP Plan Work?

ULIPs work by combining insurance and investment. A portion of premiums secures life coverage, while the rest is invested in chosen funds. Policyholders can switch funds based on goals. The fund value or sum assured is provided on maturity or death, offering a dynamic financial solution.

  • Best ULIP Plans combine life insurance coverage with investment opportunities.

  • A portion of the premium you pay goes towards providing life insurance, while the rest is invested in various funds based on your investment objective and risk appetite.

  • The investment component is linked to the performance of the funds like Mid Cap Fund, Large Cap Fund, Debt Fund and Balanced Fund you have selected. If the value of the underlying funds goes up, the value of your ULIP investment also increases, and vice versa.

  • ULIP Plan offers investors the flexibility to switch between different funds as per market conditions and performance.

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What is ULIP? | How to Choose the Best ULIP Plan in 2024?

Why Should ULIPs Be Part of Your Financial Planning in 2024?Why Should ULIPs Be Part of Your Financial Planning in 2024?

Let’s understand ULIPs with an example:

Akash, a 30-year-old man, invested in a ULIP Plan for 20 years. He pays a yearly premium of Rs. 50,000 for 10 years. 

Policy Details:

Initial Sum Assured = Rs. 5,00,000 (yearly premium x 10)
Annual Administration and other charges = Rs. 2500
Total Annual Investment = Rs. 47,500
Initial NAV = Rs. 10
Units purchased = (47500/10) = 4750

Final ULIP Plan Returns:

Death Benefits Maturity Benefits
Payment made to the nominee if Akash dies within the policy term = Rs. 5,00,000 (Sum Assured) or the Fund Value (whichever is higher). Payment is made at the time of maturity if Akash is alive, which is the Fund Value.

What is a ULIP Calculator?

A ULIP calculator is an online tool that helps investors calculate their premium payments and expected returns based on their investment horizon, risk, and financial goals. The calculator takes into account various factors, such as

  • Amount you wish to invest (monthly/yearly/one-time)

  • Policy tenure (for which you wish to stay invested)

  • Periodic investment period (for which you wish to pay premiums)

  • Expected rate of return

By entering these specifics, the investors can analyze projected investment growth overall and choose a preferred plan.

Investment Return Calculator (Power of Compounding)
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Different Types of ULIP Plans

ULIPs are classified based on their purpose and death benefit. Let us learn about them in detail.

  1. Classification by Purpose

    Various ULIP types include Retirement ULIPs, Wealth Collection ULIPs, Children's Education ULIPs, and Health Benefits ULIPs, helping to meet diverse financial needs and goals.

    • ULIP Plan for Retirement: With Whole Life ULIPs, you have an effective retirement planning tool. In the ULIP Pension Plan investment component of these plans lets you accumulate a significant corpus over the long term. Imagine having a substantial amount ready for your retirement needs, paid out to you in the form of annuities once you retire.

    • ULIP Plan for Wealth Collection: Are you in your late twenties or early thirties? ULIPs could be your ticket to accumulating wealth over time. By investing in this plan, you gain the flexibility to fund your future financial goals. Think of it as a strategic move to secure your financial future.

    • ULIP Plan for Children's Education: As a parent, don't you want the best for your child's education? Child ULIP Plans come with a waiver of premium features. Imagine a situation where, due to disability, critical illness, or even death, you're unable to pay the premium. This feature ensures that your policy continues without any hitches, making sure the financial goals you've set for your child's future remain uncompromised.

    • ULIP Plan for Health Benefits: Did you know that ULIPs offer more than just common benefits? They efficiently provide financial assistance to tackle medical emergencies. So, when health challenges arise, you have a financial cushion to fall back on.

  2. Classification by Death Benefits

    ULIP plans come in two types: Type 1 prioritizes life coverage with a higher payout on demise, while Type 2 emphasizes investment, offering the fund value on death. Both types allow customization for diverse financial goals.

    Parameter Type 1 ULIP Plans Type 2 ULIP Plans
    Lock-in period 5 years 5 years
    Investment options Equity, debt, or a mix of both Equity, debt, or a mix of both
    Returns Market-linked returns Market-linked returns
    Death Benefit Plans pay either the sum assured or the higher fund value to the nominee upon the policyholder's death.

    For example: If the sum assured is ₹40 Lakh and the fund value is ₹50 Lakh, the beneficiary shall receive the fund value.
    Plans pay the sum assured and the fund value together, resulting in a higher premium and a larger payout to the nominee.

    For example: If the sum assured is ₹40 Lakh and the fund value is ₹50 Lakh, the beneficiary shall receive ₹90 lakh (₹40 lakh sum assured + ₹50 lakh fund value).
    Objective Guaranteed death benefit payout Higher returns
    Suitable for Risk-tolerant investors Risk-tolerant investors
    Sum at Risk As the fund value steadily increases over time, the amount of risk faced by the insurance company decreases correspondingly. As the fund value steadily increases over time, the amount of risk faced by the insurance company decreases correspondingly.

How Are ULIPs a Safe Way For Wealth Creation?

  1. Flexible Investments

    Description: ULIPs offer flexible investment options.

    • Choose where funds are invested

    • Switch funds to leverage market changes

  2. Tax Benefits

    Description: ULIPs provide tax benefits on the investment amount.

    • Tax benefits under Section 80C of the Income Tax Act of 1961

    • Reduce your tax burden while growing your money

  3. Profitability

    Description: ULIPs allow access to multiple asset classes.

    • Diversify your portfolio

    • Long-term wealth creation and profitability

  4. Lock-In Period

    Description: ULIPs come with a 5-year lock-in period.

    • Ensures long-term investment

    • Better growth opportunities over time

What are the Features and Benefits of ULIPs?

Financial Goals:
Get High Returns
Fund Control:
Free switching to manage market risk
Flexibility:
SIPs with 150+ fund options
Diverse Portfolio:
Diverse portfolio through market-linked plan
Financial Security:
Life cover for family
Liquidity:
Withdrawal option after 5 years
Benefits Of Market Linked Investment Plans
Get High Returns
Free Fund Switching
150+ Funds
Life cover
Withdrawable after 5 Years

ULIPs combine insurance and investment, offering flexibility to switch funds, tax benefits^ under Section 80C, and tax-free^ maturity proceeds. With features like a 5-year lock-in, transparent charges, and a top-up facility, ULIP plan promotes long-term financial growth and continuous life cover for loved ones, and that's why it can be considered one of the best investment plans.

Here are the features and benefits of ULIPs explained:

  • Dual Benefit: With ULIP plan, you get the dual advantage of insurance and investment. While a portion of your premium ensures you're covered with life insurance, the other part is invested in various funds of your choice.

  • Flexibility to Switch Funds: ULIPs don't lock you into one investment strategy. You can switch between different ULIP funds based on your investment objectives and risk tolerance. This means you can regularly tailor your investment portfolio to aim for the best returns.

  • Protecting Your Child's Future: Considering your child's future? Child ULIP plans are crafted precisely for this purpose. They come with a standout feature: the "Waiver of Premium.” If something were to happen to you, like a critical illness or disability, this feature ensures your child's policy remains active. Future premiums? They're waived off, and the policy continues as initially agreed.

  • Lock-in Period: ULIPs have a 5-year lock-in period. This isn't just a random number; it encourages disciplined investment. By committing for this duration, you're setting yourself up for long-term financial stability and the potential for maximum returns.

  • Transparency: You always know where your money is going. Detailed statements show you the charges applied, the amount invested, and the insurance coverage you have.

  • Liquidity: After the initial lock-in period, which is 5 years, you can make partial withdrawals to meet any unforeseen financial needs.

  • Tax Benefits^: Investing in ULIP plan can help you avail tax deductions under Section 80C of the Income Tax Act. The maturity proceeds you receive are tax-free under Section 10(10D)^.

  • Long-Term Investment: ULIP plan encourages you to think long-term. With benefits that compound over the years, you're incentivized to stay invested and watch your wealth grow.

  • Top-Up Facility: Got some extra cash? You can invest it in your ULIP plan through the top-up facility, enhancing your fund value and potential returns.

  • Life Cover: Your loved ones are always protected. In the unfortunate event of your demise, they will receive the sum assured or the fund value, whichever is higher.

  • Performance Tracking: ULIPs allow you to monitor the performance of your investments. You can see how your funds are doing and make informed decisions about switching or staying.

Transparency
All ULIP investments are transparent and hence a good option to put the money in.
Multiple options to choose from
From high to low risk and from equity to debt funds, there are multiple fund options in ULIP to choose from.
Liquidity
ULIPs offer partial withdrawal of money to meet unpredictable events and emergencies.
Higher returns
12-15% returns due to the availability of multiple investment options.
Low Surrender Charges
ULIPs offer reasonable surrender charges compared to traditional plans, making it a good investment option.

How to Choose the Best ULIP Plans in India?

There are some things that an investor should keep in mind while choosing the best ULIP plans in India. Here’s a list of some pointers to consider while buying one:

  1. Analysis of Personal Investment Goals

    • Align the ULIP plan with your long-term financial goals and investment horizon.

    • Clearly define insurance objectives based on age, family planning, and future requirements.

  2. Decide Investment Goals

    • Spend time deciding investment goals, ranging from education funds to post-retirement needs.

    • Look for ULIPs that align with and fulfil your specific investment goals.

  3. Compare ULIPs

    • Thoroughly compare the features and benefits of different ULIP plans.

    • Utilize online insurance comparison portals for a convenient and detailed analysis.

  4. Flexibility

    • Evaluate policy tenure flexibility based on your investment horizon.

    • Assess investment flexibility by choosing hybrid, equity, or debt ULIP plans.

  5. Evaluate Risk Profile and Financial Stability

    • Match risk appetite with investment focus (equity or debt) based on age and financial stability.

    • Younger investors may opt for higher equity exposure, while stability-focused individuals may prefer debt instruments.

  6. Understand Different Charges Levied

    • Be aware of various charges, including initial charges, premium allocation fees, and fund management fees.

    • Knowledge of charges is essential to select a ULIP plan that suits your financial preferences.

  7. Be Well-Versed with the Features and Benefits

    • Understand the unique features and benefits of each ULIP plan.

    • Choose a plan that best fits your individual requirements and financial objectives.

  8. Check the Performance of the Plan

    • Review the historical performance of the ULIP plan over the last three to four years.

    • Compare returns to benchmark indices like Nifty and Sensex to gauge performance.

  9. Solvency Ratio and Claim Settlement Ratio

    • Ensure the insurance company has a solvency ratio of at least 1.5, indicating financial stability.

    • Check the claim settlement ratio to ensure the company honours claims efficiently.

  10. Performance of ULIP Funds and Investment Strategies Offered

    • Monitor the long-term performance of ULIP funds to make informed investment decisions.

    • Explore ULIP plans that offer strategic investment options aligned with specific financial objectives.

What are the Different Types of ULIP Funds?

ULIP plans offer diverse fund options like equity, debt and hybrid funds. This variety allows investors to tailor their portfolios based on risk tolerance and financial objectives.

  • Equity Funds: Invests in stocks of companies, aiming for high returns but with higher risk due to market fluctuations. Good for long-term goals and those comfortable with risk.

  • Debt Funds: Invests in fixed-income instruments like bonds, offering stable returns with lower risk. Suitable for those seeking capital preservation and predictable income.

  • Hybrid Funds: A mix of equity and debt funds, balancing risk and return.  They offer moderate growth potential with stability. Ideal for those who want some equity exposure but with a risk buffer.

How To Manage ULIP Funds?

Managing ULIP funds effectively involves understanding various strategies that can help optimize your investment. Here are some key points to consider:

  1. Self-Switching

    One option for managing ULIP funds is through self-switching. This empowers you to take control of your investment decisions. You can tailor your premium allocation to align with your investment portfolio, risk tolerance, and financial objectives. Most ULIP providers offer a certain number of free switches per policy year, giving you flexibility to adjust your strategy as needed.

  2. Automatic Switching

    For those who prefer a hands-off approach, automatic switching can be a suitable choice. With this option, professional fund managers handle the switches based on the parameters you set when purchasing the policy. This can be beneficial for individuals who may not have the expertise or time to manage their investments actively.

  3. Investment Top-Ups

    To enhance your ULIP corpus, consider utilizing investment top-ups. This involves injecting additional funds into your ULIP plan when you have surplus savings. This strategy is often chosen when the ULIP is already performing well, allowing investors to capitalize on the opportunity and maximize returns.

How To Buy A Ulip Plan Through Policybazaar?How To Buy A Ulip Plan Through Policybazaar?

Tax Benefits on ULIPs 

The ULIPs taxation structure can be comprehended from the information provided below.

  1. LTCG Exemption 

    Long-term capital gains (LTCG) tax is exempted on ULIPs for annual premiums up to 2.5 lacs. 

  2. Income Tax Benefits Under 80C

    With a maximum exemption of Rs. 1.5 lakh under Section 80C, ULIP premiums qualify for tax savings. Moreover, the maturity benefits from ULIPs remain tax-free^. To get these benefits, it's crucial to ensure the Sum Assured or Death Benefit is at least 10 times the annual premium. Falling short of this requirement reduces income tax benefits to 10% of the Sum Assured. 

  3. Income Tax Benefits Under 10(10D)

    The maturity benefits from Unit Linked Insurance Plans are tax-free. For ULIPs issued before February 1, 2021, maturity benefits are tax-free, regardless of the total premiums paid in any given year during the policy term.

    Claiming the tax benefits on ULIPs is straightforward. Premiums and maturity proceeds enjoy tax exemption under Section 80C and 10(10D), making ULIPs an attractive choice for those seeking financial security with added tax advantages.

Disclaimer: Tax benefits and savings are subject to changes in tax laws. ^Maturity benefits are applicable for annual premiums up to 2.5 lacs.

What are the ULIP Charges? 

ULIP charges encompass premium allocation, fund management, policy administration, mortality, and surrender charges. Understand these fees for informed investment decisions.

They are subdivided into the following categories:

  • Premium allocation charge: The fee charged by the insurance company for allocating the principal to various investment funds.

  • Fund management charge: The fee charged by the fund manager for managing the investment portfolio of ULIP.

  • Mortality charge: The fee charged by the insurance company for providing the life cover under ULIP.

  • Policy administration charge: The fee charged by the insurance company to maintain policy records and provide services.

  • Switching charge: The fee charged for switching between different investment funds.

  • Partial withdrawal charge: The fee charged for making partial withdrawals from the investment corpus.

  • Discontinuance or Surrender Charges: If the ULIP is terminated before 4 years, a discontinuance charge will be applied. However, no surrender charges are imposed after the 5th year. The amount of these charges can range from ₹1,000 to ₹4,000, depending on the premium, calculated as a percentage of the fund's value and premium. The Insurance Regulatory and Development Authority of India (IRDAI) establishes the basis for these charges, ensuring they do not exceed the acquisition cost incurred by the insurer.

What is ULIP NAV?

ULIP NAV, or Net Asset Value is the value of a single unit of a ULIP fund. It signifies the unit's current worth, which is important for assessing investment performance and determining policyholder returns. ULIP NAV is calculated by dividing the total value of the fund's assets by the number of outstanding units.

ULIP NAV is important because it determines the value of your investment. When you invest in a ULIP, you buy units at the current NAV. The value of your investment will increase or decrease depending on the performance of the fund and the changes in the NAV.

ULIP NAV is calculated and published daily by the insurance company. You can find the NAV of your ULIP fund on the insurance company's website or in the fund's fact sheet.

Things to Avoid When Investing in a ULIP Plans

  • Ignoring Your Risk Tolerance: ULIPs are market-linked, meaning returns fluctuate. Choose a fund mix that aligns with your risk appetite.

  • Short-Term Goals: ULIPs are best for long-term investing (ideally 5+ years). The lock-in period and market volatility can make them unsuitable for short-term financial needs.

  • Focusing Solely on Tax Benefits: While ULIPs offer tax advantages, prioritize your investment goals first. 

  • Frequent Switching (for Self-Switching): While self-switching offers flexibility, excessive switching can negate potential long-term gains. Develop a well-defined investment strategy and avoid impulsive changes based on market changes.

  • Underestimating Investment Horizon: Don't underestimate the time commitment. Sticking with your ULIP for a long time is important to ride out market fluctuations and achieve your financial goals.

ULIP Plans by Insurance Companies

Choosing the right ULIP plan is important as it helps you secure your financial future. Here are some of the best ULIP plans offered by insurance companies in India:

Aditya Birla Sun Life Insurance
Aviva India
Bajaj Allianz Life Insurance
Bharti AXA Life Insurance
Edelweiss Tokio Life Insurance
Future Generali India Life Insurance
HDFC Life Insurance
ICICI Prudential Life Insurance
Kotak Mahindra Life Insurance
Life Insurance Corporation of India
PNB MetLife India Insurance
SBI Life Insurance
TATA AIA Life Insurance
Aditya Birla Sun Life Insurance

Aditya Birla Wealth Aspire Plan

Key features

Market-linked ULIP plan with a choice of two funds focuses on wealth creation and life protection.

Benefits

  • Flexibility to transfer your money between 16 different funds to maximise your returns.
  • You can enjoy extra coverage by choosing the optional additional rider benefits.
  • We charge no commission when you buy from us.
  • You can withdraw any amount anytime after 5 years. Multiple withdrawals are allowed.
  • Inbuilt life Cover of ₹12 Lac throughout the policy term.
  • Save up to ₹20.9L under Sections 80 C and 10(10D)^.
Learn more about ULIPs Learn More
Aviva India

Aviva i-Growth

Key Features

Unit-linked life insurance plan with a loyalty bonus, designed for long-term wealth creation.

Benefits

  • Pay regular premiums and enjoy Loyalty additions in the last 3 policy years.
  • We charge no commission when you buy from us.
  • Inbuilt life Cover of ₹12 Lac throughout the policy term.
  • Twelve free switches to transfer your money between different funds to maximize your returns.
  • You can withdraw any amount anytime after 5 years. Multiple withdrawals are allowed.
  • Save up to ₹4.75L under Sections 80 C and 10(10D)^.
Learn more about ULIPs Learn More
Bajaj Allianz Life Insurance

Bajaj Allianz Invest Protect Goal

Key Features

Unit-linked life insurance plan with investment protection, safeguarding your funds against market downturns.

Benefits

  • Life cover of ₹1.12 Cr throughout the policy term.
  • In case of Accidental Death, additional ₹56 Lac cover value is paid along with the life cover.
  • If unable to work due to Accidental Total Permanent Disability, ₹56 Lac cover is paid in addition to the life cover.
  • Mortality charges deducted will be added back to the fund value at maturity.
  • Flexibility to transfer money between different funds for maximizing returns.
  • Withdraw any amount after 5 years, with multiple withdrawals allowed.

Bajaj Allianz Goal Assure II

Key Features

Unit-linked life insurance plan with guaranteed payouts, offering a balance of protection and growth.

Benefits

  • Loyalty additions from the 6th year onwards boost maturity value.
  • Total mortality charges deducted returned to fund value at maturity.
  • No charges for unit allocation.
  • ₹12 Lac life cover provided at no cost.
  • Life cover charges returned at maturity.
  • Flexibility to withdraw any amount after 5 years.
  • Multiple withdrawals allowed.
  • Transfer funds freely between different funds.
  • Save up to ₹24.2L under section 80 C and 10(10D)^.

Bajaj Allianz Smart Wealth Goal II

Key Features

Unit-linked life insurance plan with a wealth creation focus, aiming for high potential returns.

Benefits

  • Increase maturity value with loyalty additions in the 15th, 20th, 25th, and 30th year by staying invested.
  • Mortality charges deducted in the policy returned at maturity and added back to fund value.
  • Premium Allocation charges deducted under the policy are added to Fund value after the 10th Policy year or maturity.
  • No commission charges when purchasing from us.
  • Enjoy ₹12 Lac life cover at no cost, with life cover charges returned at maturity.
  • Withdraw any amount after 5 years, with multiple withdrawals allowed.
  • Flexibility to transfer money between funds for maximizing returns.
  • Save up to ₹23.6L under section 80C and 10(10D)^.
Learn more about ULIPs Learn More
Bharti AXA Life Insurance

Bharti AXA Wealth Maximizer

Key Features

Unit-linked life insurance plan with a choice of investment options catering to diverse risk appetites.

Benefits

  • 118% of Mortality charges, Premium allocation charges, Fund management charges and Policy administration charges (applicable during the payment term) are refunded into the Policy Fund Value.
  • A percentage of Fund Value is added as Loyalty Additions.
  • Inbuilt life Cover of ₹12 Lac throughout the policy term.
  • You can withdraw anytime after the completion of the Lock-in period.
  • Flexibility to transfer your money between different funds to maximise your return.
  • Save up to ₹15.9L under section 80C and 10(10D)^.
Learn more about ULIPs Learn More
Edelweiss Tokio Life Insurance

Edelweiss Tokio Wealth Secure+

Key Features

Unit-linked life insurance plan with a guaranteed maturity benefit, ensuring a minimum payout regardless of market performance.

Benefits

  • Increase your maturity value by getting rewarded with loyalty additions 6th year onwards by just staying invested.
  • The amount equal to the total of mortality charges deducted in the policy will be added back to the fund value at maturity.
  • Get rewarded with Wealth Boosters from 10th Year and loyalty additions from 6th year and increase your maturity value.
  • No charges on allocation of units.
  • We charge no commission when you buy from us.
  • ₹12 Lac life cover free of cost. Life cover charges will be returned at maturity.
  • You can withdraw any amount anytime after 5 years. Multiple withdrawals are allowed.
  • Flexibility to transfer your money between different funds to maximize your return.
  • Save up to ₹12.1L under section 80C and 10(10D)^.
Learn more about ULIPs Learn More
Future Generali India Life Insurance

Future Generali Big Dream

Key Features

Unit-linked life insurance plan specifically designed for child education and marriage planning.

Benefits

  • Extra allocation from 1% to 7% on each instalment premium is added by the insurer annually for 5 years.
  • No charges on allocation of units and policy maintenance.
  • We charge no commission when you buy from us.
  • Inbuilt life Cover of ₹12 Lac throughout the policy term.
  • You can withdraw any amount anytime after 5 years. Multiple withdrawals are allowed.
  • Flexibility to transfer your money between different funds to maximise your return.
  • Save up to ₹11.3L under section 80C and 10(10D)^.
Learn more about ULIPs Learn More
HDFC Life Insurance

HDFC Life Sampoorn Nivesh

Key Features

Unit-linked life insurance plan with loyalty bonus and waiver of premium benefit, rewarding long-term commitment.

Benefits

  • Increase your maturity value by getting rewarded with loyalty additions 10th year onwards by just staying invested.
  • We charge no commission when you buy from us.
  • Inbuilt life Cover of ₹13.2 Lac throughout the policy term.
  • Four free switches to transfer your money between different funds to maximize your returns.
  • You can withdraw any amount anytime after 5 years. Multiple withdrawals are allowed.
  • Save up to ₹17.6L under section 80C and 10(10D)^.

HDFC Life Smart Protect Plan

Key Features

Unit-linked life insurance plan focusing on both wealth creation and protection, balancing growth with security.

Benefits

  • Inbuilt life Cover of ₹34.4 Lac throughout the policy term.
  • The product offers a return of 2 times the mortality charges starting from policy year 11.
  • 2 times the total Premium Allocation Charges (excluding taxes) shall be added back in the form of allocation of extra units.
  • In case of accidental death, will be paid in addition to the life cover.
  • In the event of total permanent disability due to an accident, get regular monthly income. This monthly income will be equal to 1% of paid over a fixed period of 10 years
  • Sum total of FMC charges (excluding taxes) collected throughout the policy term will become payable at maturity.
  • You can withdraw any amount anytime after 5 years. Multiple withdrawals are allowed.
  • Save up to ₹40.4L under section 80C and 10(10D)^.

HDFC Life Click2Wealth

Key Features

ULIP plan with dual emphasis on market-linked returns and financial protection, offering simplicity and flexibility.

Benefits

  • Extra 1% of your investment amount is added by the insurer annually for 5 years.
  • The amount equal to the mortality charges deducted in the policy will be added back to the fund value at maturity, provided all due premiums have been received.
  • No charges on allocation of units and policy maintenance.
  • Inbuilt life Cover of ₹12 Lac throughout the policy term.
  • Inbuilt Accidental Death benefit of 5L.
  • Inbuilt Accidental Total and Permanent Disability Benefit of 5L.
  • You can withdraw any amount anytime after 5 years. Multiple withdrawals are allowed.
  • Save up to ₹18.7L under section 80C

HDFC Life Click2Invest

Key Features

ULIP plan designed for pure market-linked investment with a focus on wealth creation and long-term goals.

Benefits

  • No charges on allocation of units and policy maintenance.
  • Four free switches to transfer your money between different funds to maximise your returns.
  • We charge no commission when you buy from us
  • Inbuilt life Cover of ₹12 Lac throughout the policy term.
  • You can withdraw any amount anytime after 5 years. Multiple withdrawals are allowed
  • Save up to ₹18.5L under section 80C and 10(10D)^.
Learn more about ULIPs Learn More
ICICI Prudential Life Insurance

ICICI Pru LifeTime Classic

Key Features

Unit-linked life insurance plan with a choice of investment funds and riders, allowing for customisation.

Benefits

  • No charges on allocation of units.
  • We charge no commission when you buy from us
  • Inbuilt life Cover of ₹12 Lac throughout the policy term.
  • Get rewarded with Wealth Boosters from the 10th year and loyalty additions from the 6th year and increase your maturity value.
  • Four free switches to transfer your money between different funds to maximise your returns.
  • Save up to ₹23.4L under section 80C and 10(10D)^.
Learn more about ULIPs Learn More
Kotak Mahindra Life Insurance

Kotak Life E-Invest

Key Features

Unit-linked life insurance plan designed for online investing, offering convenience and ease of management.

Benefits

  • We charge no commission when you buy from us
  • The amount equal to the mortality charges deducted in the policy will be added back to the fund value at maturity, provided all due premiums have been received.
  • Inbuilt life Cover of ₹12 Lac throughout the policy term.
  • You can withdraw any amount anytime after 5 years. Multiple withdrawals are allowed
  • Twelve free switches to transfer your money between different funds to maximize your returns.
  • Save up to ₹13.3L under section 80C and 10(10D)^.
Learn more about ULIPs Learn More
Life Insurance Corporation of India

LIC SIIP Plan

Key Features

Unit-linked life insurance plan emphasising both safety and growth, catering to risk-averse investors.

Benefits

  • No charges for Policy Administration
  • The amount equal to the mortality charges deducted in the policy will be added back to the fund value at maturity, provided all due premiums have been received.
  • Inbuilt life Cover of ₹12 Lac throughout the policy term.
  • You can withdraw any amount anytime after 5 years. Multiple withdrawals are allowed
  • Save up to ₹19.5L under section 80C and 10(10D)^.
Learn more about ULIPs Learn More
PNB MetLife India Insurance

PNB Metlife Mera Wealth Plan

Key Features

Unit-linked life insurance plan focusing on wealth creation and protection, offering various fund options and riders for customisation.

Benefits

  • Loyalty Additions will be allocated at the end of every policy year, starting from the end of the sixth policy year.
  • We charge no commission when you buy from us
  • ₹12 Lac life cover free of cost. Life cover charges will be returned at maturity
  • You can withdraw any amount anytime after 5 years. Multiple withdrawals are allowed
  • Flexibility to transfer your money between different funds to maximise your return
  • Save up to ₹17.3L under section 80C and 10(10D)^.
Learn more about ULIPs Learn More
SBI Life Insurance

SBI Life eWealth Insurance

Key Features

Unit-linked life insurance plan designed for online investing, offering convenience and a wide range of investment options.

Benefits

Provides life cover, market-linked returns through a user-friendly online platform, access to various fund options, the ease of managing your policy digitally, and potential for wealth creation.

Learn more about ULIPs Learn More
TATA AIA Life Insurance

TATA AIA Fortune Pro

Key Features

Unit-linked life insurance plan with a choice of investment options and riders, allowing for customization based on your risk appetite and goals.

Benefits

  • Loyalty Additions boost fund value after 10 years.
  • Commission-free purchases with us.
  • 12 free switches annually.
  • Flexibility to transfer funds for higher returns.
  • Withdraw any amount after 5 years; multiple withdrawals allowed.
  • ₹12 Lac inbuilt life cover for entire policy term.
  • Save up to ₹25.8L under sections 80C and 10(10D)^.

TATA AIA Smart Sampoorna Raksha

Key Features

Unit-linked life insurance plan specifically designed for child education and marriage planning, providing financial security for your child's future.

Benefits

  • Life cover of ₹1.48 Cr throughout the policy term.
  • Accidental Death Benefit of 50 lacs.
  • Accidental Total and Permanent Disability Benefit of 50 lacs.
  • At the end of the 10th, 11th, 12th, and 13th policy years, 2 times the total Premium Allocation Charges.
  • Starting from the 11th policy year, get 2 times the mortality charge at the end of each policy month in the form of the addition of units.
  • You can withdraw any amount anytime after 5 years. Multiple withdrawals are allowed.
Learn more about ULIPs Learn More

ULIP Plan Buying Guide

ULIPs (Unit Linked Insurance Plans) combine life insurance coverage with market-linked investments. But are they the perfect fit for you? Let's break it down.

Who Should Consider ULIPs?

  • Long-Term Investors: ULIPs are best suited for those with a long-term investment horizon (ideally 5+ years) to ride out market fluctuations.

  • Goal-Oriented Investors: ULIPs can help achieve financial goals like retirement planning or child's education by offering a disciplined savings approach and potential growth.

  • Risk-Aware Investors: ULIPs offer a mix of insurance protection and market-linked returns. Understanding your risk tolerance is crucial before investing.

Why Invest in ULIPs?

  • Dual Benefit: Provides life cover while offering the potential for wealth creation through market-linked investments.

  • Flexibility: You can often choose your investment mix (debt, equity, balanced) and switch between them to align with your risk appetite.

  • Disciplined Savings Habit: ULIPs require regular premium payments, fostering a disciplined savings approach. This consistency can be invaluable in achieving long-term financial goals, especially for those who might struggle with saving on their own.

  • Potential for Higher Returns: Compared to traditional life insurance plans, ULIPs offer the opportunity for significantly higher returns through their market-linked investments. This growth potential can help you outpace inflation and accumulate a larger corpus over time.

  • Transparency and Control: ULIPs provide regular statements detailing your fund allocation, investment performance, and associated charges. This transparency allows you to monitor your progress and make informed decisions about your investment strategy within the plan.

Key Terminology for ULIPs 

  • Premium: The amount paid by the policyholder to the insurance company to maintain the ULIP.

  • Fund: A pool of money collected from ULIP investors, which is invested in various financial instruments such as stocks, bonds, or a mix of both, based on the fund's objectives.

  • Life Coverage: The protection or insurance component of ULIP that provides a lump sum payment to the nominee in case of the policyholder's demise during the policy term.

  • Investment Horizon: The period for which an investor intends to stay invested in a financial product like ULIPs to achieve their financial goals.

  • Sum Assured: The guaranteed minimum amount that the insurance company pays to the nominee in case of the policyholder's death.

  • Risk Appetite: The level of risk an individual is comfortable with while making investment decisions, which influences their choice of investment options within ULIPs.

  • Tax Benefits: Advantages provided by the government to ULIP investors, such as deductions under Section 80C of the Income Tax Act and tax-free maturity proceeds under Section 10(10D).

  • Premium Allocation Charge: The fee deducted by the insurance company from the premium paid by the policyholder for allocating funds to different investment options.

  • Fund Management Charge: The fee charged by the fund manager for managing the investment portfolio of ULIPs.

  • Mortality Charge: The fee charged by the insurance company to provide life cover under ULIPs.

  • Policy Administration Charge: The fee levied by the insurance company for administrative services related to the ULIP policy.

  • Switching Charge: The fee incurred when policyholders switch between different investment funds within ULIPs.

  • Partial Withdrawal: The facility that allows policyholders to withdraw a portion of their invested amount from ULIPs before maturity for financial needs.

  • Net Asset Value (NAV): The value of a single unit of a ULIP fund, calculated by dividing the total value of assets by the number of outstanding units.

  • Lock-in Period: The duration during which policyholders cannot withdraw or surrender their ULIP investments without incurring charges, typically around five years.

  • Solvency Ratio: A measure of an insurance company's financial stability and ability to meet its obligations, including claim settlements.

  • Claim Settlement Ratio: The percentage of claims settled by an insurance company compared to the total number of claims received during a specific period.

  • Fund Value: The total value of investments held within a ULIP, representing the cumulative performance of the chosen funds.

  • Top-Up Facility: An option available in ULIPs that allows policyholders to invest additional funds beyond their regular premiums, enhancing their investment corpus.

  • Death Benefit: The amount payable to the nominee or beneficiary upon the policyholder's demise during the policy term, consisting of the sum assured or fund value, whichever is higher.

  • Maturity Proceeds: The amount received by the policyholder upon maturity of the ULIP, which includes the accumulated fund value and any applicable bonuses.

  • Waiver of Premium: A feature in ULIPs that waives future premium payments if the policyholder experiences a specified event like critical illness or disability, ensuring continuity of the policy.

  • Liquidity: The ease with which policyholders can access their funds in a ULIP, typically available after the lock-in period for meeting financial emergencies.

  • Long-Term Investment: A strategy in ULIPs that encourages policyholders to stay invested for an extended period to benefit from compounding returns and potential market growth.

  • Risk Profile: An assessment of an individual's willingness and capacity to tolerate investment risk, influencing their fund selection and asset allocation within ULIPs.

  • Performance Tracking: The process of monitoring the investment performance of ULIP funds over time, allowing policyholders to make informed decisions about fund switches or reallocations.

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ULIP Faqs

  • What are New Age ULIPs?

    New-age ULIPs (Unit Linked Insurance Plans) are essentially improved versions of traditional ULIPs that address some of the common pain points. Some of the key features of new-age ULIPs include:
    • Lower charges: New-age ULIPs have lower charges than traditional ULIPs, such as premium allocation charges, fund management charges, and policy administration charges. This can result in higher returns for investors over the long term.

    • Greater flexibility: New-age ULIPs offer greater flexibility in terms of investment options, fund switching, and partial withdrawals. This allows investors to tailor their investment strategy to their individual needs and risk appetite.

    • Enhanced transparency: New-age ULIPs offer enhanced transparency in terms of fund performance and investment costs. This helps investors make informed decisions about their investments.

    Overall, new-age ULIPs offer several advantages over traditional ULIPs. Investors looking for a flexible, transparent, and cost-effective investment option should consider them.

  • What are the Myths about ULIP Investment?

    Here are some common myths debunked about ULIPs:
    • Myth: ULIPs are not good investments.

      Reality: New age ULIPs can be a good investment option, especially for those seeking a combination of life insurance and market-linked returns. However, like any investment, it's crucial to understand the product, choose the right plan, and consider your financial goals.

    • Myth: ULIPs are complex and difficult to understand.

      Reality: New age ULIPs are becoming more transparent with simpler structures and online access to monitor your investments.

    • Myth: ULIPs are expensive.

      Reality: Newer ULIPs come with lower costs and more focus on investment value. Be sure to compare plans and understand the charges involved.

    • Myth: ULIP mandate continuation

      Reality: Investors can discontinue a ULIP plan after a 5-years lock-in period without any surrender charges. While not mandatory, it is in the best interest to continue investing in ULIPs after 5 years as it helps accumulate a higher corpus in the long run.

    • Myth: Market volatility reduces life cover

      Reality: The life cover remains unchanged despite market fluctuations. If the insured passes away during the policy term, ULIP plans pay either the complete life cover or the fund value, whichever is higher.

  • What is the difference between a ULIP & SIP?

    Here is the difference between the two investment options: SIP stands for a systematic investment plan that enables an investor to invest a stipulated amount of money in his/her preferred mutual funds at a pre-stipulated interval of time. The investment periodicity can vary from monthly to quarterly or annual basis. In simple words, a systematic investment plan is a planned approach that helps an investor to accrue a large corpus over a period of time. ULIP It is a unique insurance plan, as it comes with double benefits. It is a perfect blend of investment and insurance in a single plan. A ULIP offers the investor to enjoy insurance benefits along with the opportunity to invest in a wide range of investment options of his choice such as bonds and stocks. By this means, the investor enjoys market-linked returns and his/ her insurance needs are also taken care of at the same time.
  • What is assured sum in a unit-linked insurance plan?

    The amount an insurer agrees to pay to the insured’s nominee in case he/she passes away is known as the assured sum.
  • What is the fund value?

    In a unit-linked insurance plan, the value of the insured’s outstanding investment after deducting all the fees/ charges is known as fund value. The insurance premium for ULIPs is bound to attract additional charges. As a part of the premium that you pay towards your ULIP is deducted to meet charges. While some charges like premium allocation charge are deducted upfront as a percentage of the premium, other charges like fund management charge, mortality charge and administration charge are deducted after your money has been invested and from the invested corpus. These charges are deducted by cancelling units at the prevailing net asset value.
  • Is a ULIP taxable at maturity?

    The money received as the maturity benefit of a unit-linked insurance plan is tax-exempted as per section 10(10D)^ of the Income Tax Act, 1961.
  • Is surrender value of ULIP taxable?

    The insurance premium for ULIPs is bound to attract additional charges. Some charges like premium allocation charges are deducted upfront at the rate of predefined percentage. Additionally, there are some charges, such as mortality charges, fund management charges, administration charges etc. deducted after the amount is invested. The charges are deducted by cancelling units at the current net asset value.
  • Is any tax levied on the surrender value of ULIPs?

    Surrendering the plan mid-way has its own drawbacks. Considering the drawbacks, the latest ULIP guidelines were issued in the year 2010. Apart from other changes, the lock-in period was enhanced from 3 years to 5 years. Exiting a unit-linked insurance plan early when the lock-in period of 5 years is in effect means the policyholder has to face losses in the form of additional charges/taxes.
  • Is interest on ULIP taxable?

    No, the interest earned on ULIPs is tax-free.
  • What happens if I can’t continue ULIPs after 5 years?

    If a policyholder stops paying premium after 5 years, then the policy will be terminated on an immediate basis and accumulated policy fund amount till the discontinuation date shall be paid to the policyholder. No surrender charges are for policies that are more than 5 years old.
  • What is a low cost ULIP? Why should I invest?

    In the recent years, IRDAI had capped charges (excluding mortality) at 3% for ULIP policies with tenure of up to 10 years and 2.25% for those policies with term of over 10 years. As a result, commission rate and surcharge values have come down. Due to this, insurance companies have launched ULIPs at a low cost. These investment-cum-insurance plans have become a low cost investment option. Indeed, it is a right time to break the historical aversion to ULIPs and start investing in them. Unlike mutual funds, maturity proceedings in unit-linked insurance plans are tax free under the Section 10(10d)^.
  • What are the common features of ULIPs?

    Unit-linked insurance plan is loaded with following features- Allows for switching between funds Additional riders and benefits Flexibility to choose premium and life cover Tax benefits Top-ups Loyalty additions at the maturity
  • How to make money through ULIPs?

    The secret lies in the art of asset allocation that is choosing and switching between funds. All you have to learn is manage and shift funds strategically. Patience is the virtue you need to have, to be able to make money through ULIPs. Letting the policy live for longer period of time maximize your chances of earning high returns from the investments
  • What are the different types of ULIPs?

    ULIPs can be broadly classified under two heads- Type I ULIP - In case the insured dies, the nominees are paid either the sum assured or the fund value, whichever is higher. Type II ULIP - In case the insured dies, the nominees are paid a total of sum assured and the fund value.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

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Ulip Plans Insurance Reviews & Ratings
4.7 / 5 (Based on 243 Reviews)
(Showing Newest 10 reviews)
Neha
Lucknow, June 04, 2024
Transparent Process with Policybazaar
Policybazaar provided a transparent process while helping me select ICICI Pru LifeTime Classic. Their assistance made the investment journey smooth. Highly recommend their services
Ria
Ahmedabad, June 03, 2024
Efficient Service from Policybazaar
Policybazaar provided efficient service while assisting me with Bajaj Allianz Goal Assure. Their guidance made the investment process seamless. Thank you Policybazaar
Deepak
Jaipur, June 02, 2024
Seamless Experience with Policybazaar
Policybazaar provided a seamless experience while assisting me with Aditya Birla Wealth Aspire Plan. Their expertise and support were commendable. Thank you Policybazaar
Shreya
Pune, May 31, 2024
Reliable Assistance from Policybazaar
Policybazaar provided reliable assistance while helping me choose TATA AIA Fortune Pro. Their guidance and support were invaluable. Highly recommend their services
Rajesh
Hyderabad, May 31, 2024
Transparent Process with Policybazaar
Policybazaar provided a transparent process while helping me select HDFC Life Smart Protect Plan. Their assistance made the investment journey smooth. Highly recommend their services
Meenal
Kolkata, May 30, 2024
Efficient Service from Policybazaar
Policybazaar provided efficient service while assisting me with PNB Metlife Mera Wealth Plan. Their guidance made the investment process seamless. Thank you Policybazaar
Arjun
Chennai, May 28, 2024
Seamless Experience with Policybazaar
Policybazaar provided a seamless experience while assisting me with SBI Life eWealth Insurance. Their expertise and support were commendable. Thank you Policybazaar
Sneha
Bangalore, May 28, 2024
Aditya Birla Wealth Aspire Plan Comprehensive Coverage
Aditya Birla Wealth Aspire Plan offers comprehensive coverage. Policybazaars guidance and support throughout the investment process were commendable. Thank you Policybazaar
Kavya
Delhi, May 27, 2024
Bajaj Allianz Smart Wealth Goal Smart Investment Move
Opting for Bajaj Allianz Smart Wealth Goal was a smart investment move. Policybazaars assistance in selecting this plan was exceptional. Highly satisfied
Arjun
Mumbai, May 26, 2024
TATA AIA Smart Sampoorna Raksha Reliable Coverage
TATA AIA Smart Sampoorna Raksha provides reliable coverage. Policybazaars assistance in choosing this plan was invaluable. Thumbs up
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